Asia Summary and Highlights 14 June
The PBoC has kept the 1-year MLF interest rate unchanged at 2.5%
Asia Session
We have a barrage of Chinese data to begin our week with and they are mixed, tilting towards the downside. The property market remains depressed with prices falling at the fastest pace in almost a decade. The PBoC has kept the 1-year MLF interest rate unchanged at 2.5% and seems to signal LPR to be unchanged later in the month. The Chinese equities market under performed Hong Kong and Japanese counterpart after the data. AUD/USD is dragged by sentiment and is trading 0.16% lower at 0.6604, NZD/USD also down 0.28% while USD/CAD rose 0.07% as oil slipped thirty cents.
After market participants digested the BoJ's disappointment, JGB yields continue to fall with 10yr below 1% and fast approaching Friday low at 0.9%. The price action in USD/JPY points toward market participants clearly disappointed but concern after BoJ intervention at such level and will be on their toes for long position. USD/JPY is trading 0.02% lower at 157.35. Else, EUR/USD is unchanged and GBP/USD is down 0.03%.
North American session
USD/JPY saw an early dip below 157 but recovered modesty to around 157.30 through the session while USD/CHF slipped to 0.89. Elsewhere the USD saw early strength before a modest correction, with EUR/USD recovering to 1.07 after falling to 1.0670. GBP/USD remained weak, holding below 1.27 after an early break below, but USD/CAD fully reversed its earlier gains as AUD/CAD drifted lower.
There was not much news, though June’s Michigan CSI was weaker than expected at 65.6 from 69.1, the fall led by views on current conditions, while Fed’s Mester and Goolsbee welcome the May CPI data.